Teen Finances

In the Morehead home, balancing the checkbook and reviewing credit card statements is a family event. Both of the accounts belong to 17-year old Janson.

“I definitely felt like he was old enough and mature enough and since he’s a junior I thought that it was time he started learning how to handle money,” says Janson’s mother Cassandra Morehead.

If he had his way, Janson admits he would spend like crazy. But his parents set limits. With his checking account, he can buy clothes, books or go to the movies or out to eat with friends.

As for the credit card? Janson says, “It’s all actually approved by my mom so when the statement comes she knows that it’s all stuff she’s okay with.”

Experts say it’s important for teens to have some control over their money.

“[Otherwise] they’re gonna become frustrated; they’re gonna probably want things even more and as soon as they can buy something they will. They lose that impulse control,” explains psychologist John Lochridge.

Experts say those impulses can lead to debt. Two-thirds of college students for example have credit cards and 80-percent of them owe money. So it’s important for parents to talk to their kids early and often about money.

“I think that it’s easy for kids nowadays to get a hold of money and not appreciate it; not understand the value of it and what it means to have a short -term sacrifice for long-term gain,” says Cassandra Morehead. She and her husband began teaching Janson and his younger brother about finances at an early age.

Janson says working with his parents to manage his money is building skills that will last a lifetime.

“It gives me assurance that when I’m out there on my own I’ll be able to keep track of everything- watch out and spend wisely,” he says.

By Larry Eldridge, Jr.
CWK Network, Inc.

According to a recent publication, teenagers spend over $100 billion per year on clothing, food and entertainment. In addition, recent findings indicate that 461,000 Americans filed for bankruptcy to avoid having to pay their creditors. With these numbers as evidence, it’s no wonder that children are growing up with less financial responsibility than ever before.

By Larry Eldridge, Jr.
CWK Network, Inc.

Talking with your children about finance and debt is extremely important for their fiscal futures. A recent study revealed that only 42 percent of eighth to twelfth graders said their parents discussed finances with them on a regular basis. Seventy-nine percent of them, however, said they are interested in how to manage their money. Experts give three main reasons why parents don’t talk to their children about money.

• Parents don’t know how to manage money very well themselves , so they can’t get a handle on what to tell their kids. If parents are living paycheck-to-paycheck, building debt on charge cards and home equity loans and not saving for the long term, it’s hard to know what to tell children.
• Parents aren’t practicing what they ought to be preaching. If parents are not using self-discipline by setting a good example for their kids, how can they hold their kids to a higher standard than they hold themselves? Modeling behavior takes a serious commitment. The average household debt is now a record 101 percent of income, up from 84 percent a decade ago.
• Their parents didn’t talk to them about money , so now they don’t know how to talk to their own kids about money. Also, perhaps because today’s parents didn’t learn money management, they still don’t know how it all fits together. They may be 45 to 50 years old and still making it up as they go along.